DCT

6:21-cv-01005

Etla LLC v. PayPal Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 6:21-cv-01005, W.D. Tex., 09/28/2021
  • Venue Allegations: Plaintiff alleges venue is proper in the Western District of Texas because Defendant maintains a regular and established place of business in the district, has transacted business there, and has allegedly committed acts of patent infringement within the district.
  • Core Dispute: Plaintiff alleges that Defendant’s PayPal "Super App" infringes a design patent related to an animated graphical user interface for a display screen.
  • Technical Context: The technology relates to the ornamental design of user interfaces for mobile payment applications, a field where user experience and visual design are significant factors in market competition.
  • Key Procedural History: The complaint was filed on the same day that the patent-in-suit was issued by the U.S. Patent and Trademark Office. This timing suggests the complaint was prepared in advance of issuance and may be relevant to the analysis of damages and willfulness, as it raises questions about when Defendant could have had notice of the issued patent.

Case Timeline

Date Event
2020-09-03 Priority Date (Application Filing) for U.S. D931,899 Patent
2021-09-28 U.S. D931,899 Patent Issued
2021-09-28 Complaint Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Design Patent No. D931,899 - "Display screen portion with animated graphical user interface," issued September 28, 2021

The Invention Explained

  • Problem Addressed: As a design patent, the patent does not articulate a technical problem to be solved. Instead, it presents a new, original, and ornamental design for an article of manufacture, specifically an animated graphical user interface ('899 Patent, Title).
  • The Patented Solution: The patent claims the ornamental design for an animated graphical user interface, presented in two embodiments ('899 Patent, CLAIM). The complaint specifically asserts the second embodiment, which consists of a three-stage animated sequence shown in Figures 3, 4, and 5 ('899 Patent, DESCRIPTION; Compl. ¶12). The animation transitions between an initial payment option screen (FIG. 3), a screen showing a grid of circular elements resembling a keypad (FIG. 4), and a final screen showing a transaction amount and a cancel option (FIG. 5). The claimed design is limited to the elements shown in solid lines; portions of the interface shown in broken lines, such as the device frame and certain text, are disclaimed and do not form part of the patented design ('899 Patent, DESCRIPTION).
  • Technical Importance: The design provides a specific visual aesthetic and animated user flow for a financial transaction interface on a mobile device, a critical component of the user experience in the digital payments sector.

Key Claims at a Glance

  • Design patents contain a single claim. The claim of the ’899 Patent is for "The ornamental design for a display screen portion with animated graphical user interface, as shown and described." (’899 Patent, CLAIM).
  • The complaint specifies that it is asserting the second embodiment of the design, which comprises the visual appearance of the animated sequence depicted in Figures 3 through 5. (Compl. ¶12; Count I Heading).

III. The Accused Instrumentality

Product Identification

The accused instrumentality is the PayPal "Super App" product for iOS and Android operating systems (Compl. ¶10).

Functionality and Market Context

The complaint alleges that the accused PayPal "Super App" includes animated graphical user interface products that embody the design claimed in the ’899 Patent (Compl. ¶12). The complaint does not contain a detailed description or any visual depictions of the accused interface's functionality. Instead, it references a "side-by-side claim chart" attached as "Exhibit B," which was not included with the public filing of the complaint (Compl. ¶10).

IV. Analysis of Infringement Allegations

The complaint references a claim chart exhibit that was not provided. The infringement theory is therefore summarized based on the complaint's narrative allegations.

The core of the infringement allegation is that the animated graphical user interface within the PayPal "Super App" is substantially similar in its ornamental appearance to the second embodiment of the design claimed in the ’899 Patent (Compl. ¶¶ 10, 12). The infringement test for a design patent is that of the "ordinary observer"—whether such an observer, familiar with the prior art designs, would be deceived into believing the accused design is the same as the patented design.

No probative visual evidence provided in complaint.

Identified Points of Contention

  • Visual Similarity: The central dispute will be a direct visual comparison between the accused PayPal interface and the sequence shown in Figures 3-5 of the ’899 Patent. The outcome will depend on the overall visual impression created by both designs.
  • Scope Questions: A key question will be the effect of the disclaimed subject matter. The ’899 Patent uses broken lines to disclaim the mobile device frame and specific text elements like "Send Request Split" and "CANCEL" ('899 Patent, DESCRIPTION; FIGS. 3, 5). The infringement analysis must focus only on the claimed solid-line elements, and a court will have to determine whether, stripped of these disclaimed elements, the accused design and the patented design are substantially similar.
  • Animation Sequence: The patent claims a sequential transition between three distinct visual states ('899 Patent, DESCRIPTION). The analysis will require evidence of whether the accused PayPal app transitions through a visually similar sequence of screens.

V. Key Claim Terms for Construction

In design patent litigation, the claim is understood to be defined by the drawings rather than by textual limitations. Formal construction of specific terms is therefore uncommon. The primary focus is on the overall visual appearance of the claimed design.

The key interpretive issue will not be a specific term, but rather the overall scope of the design as depicted in the figures. The analysis will center on the visual elements shown in solid lines and their arrangement as a whole, including the transitions between Figures 3, 4, and 5 ('899 Patent, DESCRIPTION). The court's interpretation will be guided by the drawings themselves in determining the boundaries of the claimed ornamental design.

VI. Other Allegations

Indirect Infringement

The complaint’s prayer for relief seeks a judgment for indirect infringement, but the body of the complaint does not plead facts to support such a claim. (Compl., Prayer for Relief ¶(a)). Count I alleges that PayPal itself is "making, using, distributing, offering to sell and/or selling" the accused products, which are acts of direct infringement. (Compl. ¶12). The complaint does not allege facts related to knowledge or intent to encourage infringement by others, which are required for an indirect infringement claim.

Willful Infringement

The complaint does not contain an explicit allegation of willful infringement. It seeks enhanced damages under 35 U.S.C. § 284, which are awarded for willful or egregious conduct, but it does not plead a factual basis for such an award (Compl., Prayer for Relief ¶(b)). The complaint's filing on the same day the patent issued makes an allegation of pre-suit knowledge of the issued patent challenging.

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of visual comparison: Applying the "ordinary observer" test, is the ornamental design of the animated interface in the PayPal "Super App" substantially the same as the specific three-stage sequence claimed in the second embodiment of the '899 Patent, particularly when the disclaimed (broken-line) elements are properly excluded from the analysis?

  • A key evidentiary question will be the content of the infringement contentions. As the complaint lacks any visual or descriptive detail of the accused product, the case will hinge on the evidence Plaintiff produces to show what the accused interface actually looks like and how it functions.

  • A third question relates to damages and notice: Given that the complaint was filed on the same day the patent issued, a central issue may be establishing the date from which damages can accrue. The timing raises the question of when Defendant could have had legally sufficient notice of the asserted patent.